Quick answer: Marketplace insurance is almost always cheaper than COBRA for people who qualify for premium tax credits (income under roughly $60,000/year single, or $123,000/year for a family of 4 in 2026). COBRA makes more sense if you need uninterrupted coverage mid-treatment or if your income is high enough that marketplace subsidies phase out.

Why COBRA costs so much

When you have employer health insurance, your employer typically covers 70-80% of the premium. COBRA lets you keep that exact plan -- but you now pay both the employee and employer share, plus a 2% administrative fee.

If your employer paid $600/month toward your family's $800/month premium and you paid $200, COBRA means you suddenly owe the full $816/month. That's quadrupling your out-of-pocket cost for the exact same plan.

Average COBRA costs in 2026:

• Single: $600-$900/month
• Family: $1,700-$2,200/month

These are rough national averages; actual costs depend entirely on your prior employer's plan.

Why marketplace plans are often cheaper

The ACA marketplace offers subsidies based on income -- specifically, premium tax credits that reduce your monthly premium. If you recently lost your job, your projected income for the rest of the year may be low enough to qualify for substantial subsidies.

Under the 2025-2026 enhanced subsidy rules, premium tax credits are available to households earning up to 400% of the federal poverty level, with additional relief for higher incomes if premiums exceed 8.5% of income.

Example: A 38-year-old in Illinois with $35,000 projected income for 2026 might qualify for a Silver plan at $100-$200/month vs. $650/month for COBRA. The plans won't be identical, but the cost gap is often dramatic.

What you give up by switching from COBRA

You may need new providers. Marketplace plans have their own networks. If you're mid-treatment with a specialist or on an ongoing prescription, verify that the marketplace plan covers your current providers and drugs before switching.

Deductible resets. If you've met part or all of your current-year deductible, switching to a new plan resets it to zero. Factor in what you've already spent -- if you hit your $3,000 deductible in February, switching in March means starting over.

The plan itself differs. COBRA preserves your exact current plan. Marketplace alternatives may have different formularies, different specialist tiers, and different cost-sharing structures.

See: health insurance deductible vs. out of pocket to understand plan cost structures before comparing.

The timing rules

COBRA enrollment: You have 60 days from losing coverage to elect COBRA. If you elect it, coverage is retroactive to your coverage loss date -- meaning you can wait until you actually have a medical expense before enrolling, then pay back-premiums.

Marketplace special enrollment: Losing job-based health insurance is a qualifying life event. You have 60 days to enroll in a marketplace plan. Coverage is not retroactive -- it starts the 1st of the month after you enroll.

Strategic approach: If you're healthy, hold off on electing COBRA and enroll in a marketplace plan for prospective coverage. If you have a medical emergency in the gap, retroactively elect COBRA (you still have 60 days from the loss event).

When COBRA is the right answer

COBRA beats marketplace coverage in specific situations:

You're close to meeting your out-of-pocket maximum. If you've spent $4,000 of your $6,000 OOPM, COBRA for 2-3 months to reach the cap is often worth the premium.

You have ongoing specialist care. If you're mid-treatment with an oncologist, high-risk OB, or other specialist who isn't in any marketplace network, COBRA preserves continuity of care.

Your income is high enough to get no subsidy. At $90,000 single income, marketplace subsidies may be minimal. COBRA might be comparable in price with better network coverage.

You expect to get new employer coverage quickly. If you're between jobs and expect a new employer plan in 30-60 days, a month or two of COBRA may be simpler than enrolling in a marketplace plan and then immediately switching.

For current COBRA pricing details, see: COBRA insurance cost explained.

Frequently asked questions

How do I calculate my projected income for marketplace subsidies?

Marketplace subsidies are based on your annual projected income, not your recent employer income. If you lost your job in June and won't work the rest of the year, your income for subsidy purposes might be much lower than your prior salary. Include unemployment benefits, freelance income, and investment distributions.

Can I switch from COBRA to marketplace mid-year?

Yes. If you actively cancel COBRA, that counts as a qualifying event and gives you 60 days to enroll in a marketplace plan. Open enrollment (November 1 - January 15) is another entry point without needing a qualifying event.

Does COBRA cover dental and vision?

Only if you were enrolled in your employer's dental or vision plan. COBRA applies to the same plans you had.

What happens if I miss the 60-day COBRA election window?

You lose COBRA rights permanently for that coverage loss event. You can still enroll in a marketplace plan within the same 60-day special enrollment window. Consider the marketplace first -- it's typically cheaper anyway.

What is COBRA continuation coverage for fewer than 20 employees?

Small employers with fewer than 20 employees are exempt from federal COBRA requirements. Some states have "mini-COBRA" laws that extend similar continuation rights -- coverage length and rules vary by state.